GIS – computer based tool for collecting storing, retrieving and displaying demographic data on maps, portraying relevant information on a map makes it easier for decision makers to understand

Service and Retail locations…..

nearness to raw materials is not usually a consideration, customer access is a prime consideration for some restaurants, hotels, etc
Tend to be profit or revenue driven and so are clustering

Evaluating location alternatives….

transportation model,
factor rating,
center of gravity method

Locational cost profit volume analysis….

Determine the fixed and variable costs for each alternative
Plot the total cost lines for all alternatives on the same graph

Location cost profit volume analysis…

Assume that fixed cost are constant for the range of probable output

variable costs are linear for the range of probably output

Only one product is involved

Location cost profit volume analysis……continues

Total cost = FC + V * Q

Factor Rating ………

general approach to evaluating locations that includes quantitative and qualitative inputs

Procedure: determine which factors are relevant,
assign a weight to each factor that indicates its relative importance compared with all other factors,

decide on a common scale for all factors and set a minimum acceptable score

Center of gravity method….

treats distribution cost as a linear function of the distance and quantity shimmed
the quantity to be shipped to each destination is assumed to be fixed
the method includes the use of a map that shows the locations of destinations

COG continues….

when the quantities to be shipped to every location are unequal, you can obtain the coordinates of the center of gravity by finding the weighted average of the x coordinates and the average of the y coordinates.

A “micro” factory is a small automated facility with a narrow product focus located near major markets.

True

Retail businesses generally prefer locations that are not near other retailers, as this reduces their competition.

False

Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. Location choice J has monthly fixed costs of $150,000 and per-unit variable costs of $9. At what volume would these locations have equal total costs?

50000

In location planning, the location of raw materials, the location of markets, and labor factors are: